May 17, 2012 –How Could J.P. Morgan Lose $2 Billion? Months before Bruno Iksil became famous as the “London whale,” the trader who contributed to a loss of more than $2 billion at J.P. Morgan, earned a different nickname: the “Caveman,” for pursuing trades that rivals sometimes thought were overly aggressive but often led to huge profits. Pictured above, J.P. Morgan’s London office at Canary Wharf.

Last year, Mr. Iksil (pictured above) had a $1 billion bet that companies in a certain group would default on their debt. Many hedge funds and rival banks viewed Mr. Iksil’s move as risky and took the other side of his trade.

But when the parent companies of American Airlines and power company Dynegy, Inc. filed for bankruptcy protection last year, Mr. Iksil’s positions brought a windfall of about $450 million to J.P. Morgan, saddling hedge funds and other rivals with similar-size losses.

Some of these traders would get their revenge on Mr. Iksil months later, taking the other side of bets that contributed to the more than $2 billion of losses for J.P. Morgan and raised questions about the bank’s risk controls. Mr. Iksil is expected to leave the bank but it isn’t clear when, said people familiar with the situation. Mr. Iksil didn’t respond to a request for comment. Follow the link below for the complete story of greed gone bad.